Simmerman v. Ocwen Financial & Mortgage Services, Inc. (In re Simmerman)
463 B.R. 47
| Bankr. S.D. Ohio | 2011Background
- Simmermans filed Chapter 13 petitions in 2002 and 2008; Ocwen and the Trust filed partial dismissal motions related to their loan claim.
- Plaintiffs allege a Bank One refinancing closed in 2000 with terms misrepresented; the loan ultimately became a 15-year note with a balloon payment.
- Trust allegedly acquired the note and mortgage in 2004, Ocwen serviced the loan; neither Trust nor Ocwen produced documentation showing ownership or endorsement.
- In 2008 the Defendants filed a claim with a note and mortgage identifying Bank One as holder, but no PSA-compliant evidence of transfer to the Trust was provided.
- Debtors paid over $70,000 in the 2002 bankruptcy and later questioned the validity of the claim and ownership in the 2008 bankruptcy.
- The court analyzes standing, judicial estoppel, and the merits of ECOA and FDCPA claims, granting partial dismissal and denying others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ECOA applicability to assignees | Simmermans argue Ocwen/Trust are creditors liable under ECOA. | Assignees not involved in original credit decision; not creditors under ECOA. | ECOA claim dismissed; assignees not creditors under the statute. |
| FDCPA timeliness | Ocwen violated FDCPA by collection actions post-claim; ongoing conduct alleged. | FDCPA claim time-barred by one-year statute of limitations. | FDCPA claim time-barred; dismissed on statute of limitations grounds. |
| Standing/judicial estoppel regarding pre- and post-bankruptcy actions | Simmermans have standing as estate stakeholders to pursue actions in current bankruptcy. | Judicial estoppel and standing issues bar some actions or limit who may sue. | Debtors have standing to pursue estate actions; judicial estoppel arguments rejected at this stage. |
| Disallowance of claim and ownership of note/mortgage | Defendants lack standing to file/maintain claim without proper ownership documentation. | Defendants are holders/authorized agents entitled to enforce the note. | Disallowance of claim not dismissed; issues of ownership require examination; claim allowed subject to evidentiary standards. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 F.3d 662 (U.S. 2009) (pleading must contain plausible claims, not mere conclusory statements)
- Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for complaint sufficiency)
- Teledyne Indus., Inc. v. NLRB, 911 F.2d 1214 (6th Cir. 1990) (judicial estoppel requires intentional misconduct to prevent unfair advantage)
- In re Smoak, 461 B.R. 510 (Bankr.S.D. Ohio 2011) (debtors lack standing to challenge PSA transfers affecting ownership of note)
- In re Densmore, 445 B.R. 307 (Bankr.D. Vt. 2011) (creditor/holder status required to file proof of claim)
- Wells, 407 B.R. 873 (Bankr.N.D. Ohio 2009) (lack of standing to challenge ownership of note in bankruptcy)
- In re Cook (Rogan v. Bank One, N.A.), 457 F.3d 561 (6th Cir. 2006) (holding that registry/recordation issues may not defeat enforceability where original instrument is intact)
- Veal v. American Home Mortgage Servicing, Inc., 450 B.R. 897 (Bankr.N.D. Ohio 2011) (holder vs owner distinctions under UCC and claim standing)
- Rice-Etherly v. Bank One, N.A. (In re Rice-Etherly), 336 B.R. 308 (Bankr.E.D. Mich. 2006) (FDCPA considerations in bankruptcy context; limitations issues debated)
- Kline v. Mortgage Electronic Security Systems, 659 F.Supp.2d 940 (S.D. Ohio 2009) (FDCPA limitations and scope in bankruptcy)
- Rockett v. Smith, 522 F.3d 1080 (10th Cir. 2008) (standing of Chapter 13 debtor to bring estate actions)
- In re Dickson, 427 B.R. 399 (6th Cir. BAP 2010) (Sixth Circuit BAP on standing to pursue avoidance actions)